Carers' agency Cúram proposes reforms to child benefit system

CARE FOR children should be expressed as a percentage of GDP/GNP as part of child benefit reform, according to a non-governmental organisation.

Áine Uí Ghiollagáin of the carers’ agency Cúram said child benefit should be retained as a universal payment but brought into the tax net through awarding credits to those who care for children which would be earned on an hourly basis and taxed based on who was caring for the child – parent or other relative, child minder or on a community basis.

Ms Uí Ghiollagáin said the credits would be an indirect payment to the person who cares for, supervises or educates the child, including teachers, and when cashed “would be subject to a flat tax and social insurance and pension deduction”.

She told the annual economic policy conference of the Dublin Economics Workshop that child benefit could be reformed to make it more efficient.

“But it is not a simplistic question or taxing or means testing.”

Mothers are the primary recipients of child benefit and taxation would create some problems. “Earning mothers would move into the higher tax bracket earlier,” Ms Uí Ghiollagáin said.

She gave no costings for Cúram’s proposed reform but she said in changing child benefit the questions that had to be asked were “what outcomes do we want, what they might cost and how best to achieve those outcomes”.

Ireland, France and Sweden had progressive child benefit systems which provided basic income that reached children.

She compared it to the US where 50 per cent of all children are on food stamps at any one time.

The Cúram general secretary also said birth rates were sensitive to socio-economic policy and supports and, because maternity ages were rising, this meant fewer children, which had implications in future decades for the workforce.

She asked: “Are we pricing children out?”

Tom Healy of the Nevin Economic Research Institute said Ireland was at a 50-year low in terms of investment as a percentage of GDP.

Outlining a “plan B” to current Government fiscal policy, including more investment and taxation changes, he said Ireland was at the bottom of the league of the 27 EU members for investment, which stood at 10 per cent.

He said revenue as a proportion of GDP should rise gradually from its current levels of 25 per cent to 42 per cent, and he pointed out that Ireland’s unemployment rate would be at 20 per cent rather than the current 15 per cent if not for net migration.